Skip to comments.Judge Rules That Detroit Bankruptcy Filing Is Unconstitutional
Posted on 07/19/2013 2:23:28 PM PDT by SeekAndFind
A Michigan judge ruled today that Detroit filing for chapter 9 bankruptcy on Thursday was unconstitutional. Ingham County Circuit Judge Rosemarie Aquilina said the filing must be withdrawn and that, according to the Detroit Free Press, the governor and city emergency manager “must take no further actions that threaten to diminish the pension benefits of City of Detroit retirees.”
The reduction in those particular benefits is at issue here, due to a portion of the Michigan Constitution that reads [PDF]:
“The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.”
The judge interpreted this passage to declare the bankruptcy filing unconstitutional, though this piece in the Detroit News argues that it may not be that clear-cut.
Meanwhile, Attorney General Bill Schuette is appealing the decision to the Michigan Court of Appeals and requesting the orders stayed for the time being.
Michigan judge rules Detroit bankruptcy violates state constitution
I believe bankruptcy court is a federal jurisdiction, you know, like civil rights violations which we hear about every day lately for Mr. Zimmerman.
I don’t see the standing here for this to be in state court.
So, tell the judge to STFU.
I guess this “judge” expect the city to create money out of thin air.
And she’s gonna tell on us. LOL
She’s gonna get swept aside.
Hey Judge, when the state goes BK, you will lose your income too so make plans now to get a job you are qualified for, try over at Arlington Park in Ill cleaning out horse stables.
Here’s the judge’s reasoning:
The state court judge in Michigans capital of Lansing ordered Orr to withdraw the bankruptcy petition because the state law that allowed Snyder to approve the bankruptcy violated the Michigan Constitution. The governor lacks the power to diminish or impair pension benefits, according to the ruling by Ingham County Circuit Court Judge Rosemarie Aquilina.
Contractual obligations go out of the window in Federal Bankruptcy Court. GM had contractual obligations to bondholders which evaporated 5 years ago in bankruptcy court.
Judges cant change a bankrupt city into a solvent one with a ruling, through legal alchemy. Regardless of legal status, Detroit is still broke, and pensioners can be assured that they will be too.
Actually this is an interesting case on state’s rights.
Can a state through it’s constitution or own laws limit when an individual, corporation or municipality files for federal bankruptcy relief?
My guess is not. I think you are right and the Federal judge will vacate the State judge’s order.
A wise Latina?
Where is the constitutional right against insolvency? Broke is broke. I mean who is protected here by the constitution? The debtors? The creditors? The taxpayers? This judge is just plain high.
You can’t get blood from a stone.
(unless you hit someone on the head with it)
When all is said and done, it would appear that the bankruptcy will proceed but with the pensions kept off-limits, much as a student loan not being dischargable. Naturally, the pensions are at the root of the bankruptcy so it will be a circle jerk of the first order of magnitude.
"It's cheating sir, and it's cheating good people who work," Aquilina told assistant state Attorney General Brian Devlin. "It's also not honoring the [United States] president, who took [Detroit automakers] out of bankruptcy."
Yes, I believe that is part of the point of filing for bankruptcy.
The only thing they could argue is that GM’s shareholders didn’t have a line in the MI Constitution saying their pensions couldn’t be reduced/impaired.
Still I’d like to see how they get blood from stones though. If you’re broke, I don’t know how you pay the pension obligations.
Another “Wise Latina.”
Really? What does it matter what any Judge rules. The fact is the place is a shit hole and has been bankrupt for many years and will never, let me repeat that, NEVER be solvent. Do the bankruptcy and move on.
I know hes watching this, she said, predicting the president ultimately will have to do something to make sure existing city workers pension agreements are honored.
Impeach her. She's essentially calling for a dictatorship. Obama simply executes the laws written by Congress. A judge should at the very least understand the operations of the US Constitution.
It’s interesting how a judge will read “shall not be diminished or impaired” one way here but “shall not be infringed” a completely different way somewhere else.
Under normal circumstances, what you have accrued means what you have accrued to date. Some judge a long time ago in CA deemed that to mean whatever your contract said you WILL accrue and that is what the unions there base their claims on.
They all need to go to a defined contribution plan, but the unions would rather bankrupt the country first.
No. The hack judge expects U.S. taxpayers to bailout bankrupt cities.
Never mind the fact that decades and decades of liberal policies and
Union Thugs have reduced this once active city to a current cesspool
city. She wants U.S. taxpayers to foot the bill.
In many cases bankrputcy cheats a lot of people out of money.
How often do we hear of state judges stopping bankruptcies because it’s “cheating”? They occur all the time. They are broke, they can’t pay, they can’t meet obligations, that’s why they are bankrupt.
Detroit is broke. It will continue to be broke. It will become even more broke than it is now.
One can find a “Goofy Judge” to block anything.
Judges cant change a bankrupt city into a solvent one with a ruling, through legal alchemy.
Nicely said. Legislative monitization. lol
” Impeach her. She’s essentially calling for a dictatorship.”
No thanks, we already have one.
I agree. The “dishonor Obama” comment, if true, is ridiculous beyond belief and indicative of a stupid judge. Nevertheless, the provision in the State Constitution does present an interesting legal issue. It seems to me a State should have the right to protect pensions like this, regardless of the sanity of the provision. It’s a State and its political subdivisions and they should have the right to determine such matters, but I do think it will be overturned via Federal pre emption.
I suspect her ruling -- which she knows to be a loser on appeal -- was a sop to her constituency.
” No. The hack judge expects U.S. taxpayers to bailout bankrupt cities.”
The scary part is that this is really quite minor compared to the debt many cities have on top of the debt the nation has.
And what about taxpayers rights? The unions get the officials elected who in turn approve these benefits that cannot ever be paid under the assumption that the taxpayers will pay or else.
Time for taxpayer revolt!
And I thought it was just racists.
Bimbos come in back robes too.
Remember the “supreme” court.
The day is soon when we tell these undereducated minions to shove it.
So the State has a right to enslave the few tax paying citizens left to pay for the bloated pensions of public employees because the political officials that agreed to the pensions were bought and paid for by the public employee unions?
Words mean things. Does anyone know what part of the Constitution she cited in order to rule the bankruptcy “un-Constitutional?”
No provision for Bankruptcy for states.
My guess is possibly, but the state court has no jurisdiction once bankruptcy was files and the proper place to make an argument about the constitutionality of the filing would be in the Federal bankruptcy court.
Apparently this judge believes it is okay to write rubber checks and they won’t bounce just because she says so. Perhaps she’s been watching Obama, Geithner and Bernanke for 5 years and believes if the federal government get away with writing checks without sufficient funds the state and local government can as well.
No matter what this “naive” judge says or does, the pension checks are going to start bouncing. That’s when the rubber will truly hit the road.
Be prepared for Obama to demand Congress compel the Pension Benefit Guaranty Corporation, set up to insure only private pensions and completely funded by insurance premiums from companies, to take on Detroit’s public worker pensions. Any Congressman who dares to oppose this taking of private property will be labeled a racist so McConnell, Boehner, McCain, Graham, and the rest will trip over themselves passing the legislation.
After the pension are taken care of by private industry, expect a push for billions to fund public works and infrastructure projects to rebuild Detroit.
The U.S. Bankruptcy Code trumps state law. It is called federal preemption, a concept most first year law students are familiar with.
Of course, since the judge is a Democrat, she only has to apply the laws that she likes when she feels like it.
I wonder when the position was born that "you can't get blood out of a turnip" except when it involves public employees.
If the City of Detroit is ever resurrected, it is doomed to fail again if public unions, all of them, are allowed to exist. Public employment of the incompetent as a hidden welfare program, has been tried and failed.
It's not rocket science, make public employee wages, including benefits, never higher than the average private sector similar job
And secondly, bar forever affirmative action, and make all positions competitive, meaning taking and passing a competency test; highest scores get hired first, color blind and politics blind.
Ignore common sense at your peril.
Leave welfare to the welfare (not a typo>) welfare industry.
Tried that, monumental FAIL!
She just wants to keep HER future pension safe.
That's a very simple but important point. The Michigan constitution didn't say that this applied to public entities but not private entities.
Are all pension adjustments for private companies that go bankrupt now null and void in Michigan according to this interpretation, or does this only apply to public entities with SEIU and possibly NEA employees?
Frankly, I don't think she has judicial standing here, anyway. I've heard shee's a county judge, and therefore a state level municipal bankruptcy should be out of her jurisdiction. The outrageous expansion of judge's power in recent decades cannot be what the Founders intended.
It was the state constitution and not the Federal constitution.
I think the pensions would have priority under Federal laws anyway. The judge may have some leeway to reduce the liability, but I would expect the pensions to take the softest hit of anyone.